3.
INTRODUCTION
EXECUTIVE SUMMARY
2012 was a milestone year in the life of digital as several
watershed events brought the digital marketplace to new
heights and laid the groundwork for the future of the
industry. From the London Olympics to the Facebook IPO
to the U.S. Presidential Election, this past year saw digital
media’s continued rise in prominence as part of Americans’
lives and business pursuits. This report will examine
how these events, along with the latest trends in social
media, search, online video, digital advertising, mobile
and e-commerce are currently shaping the U.S. digital
marketplace and what they mean for the coming year,
as comScore helps bring the digital future into focus.
SOCIAL MEDIA MARKET MATURES AS FOCUS TURNS TOWARD BUILDING
BUSINESS MODELS AND FINANCIAL SUCCESS
Facebook’s 2012 IPO signaled a maturation of the social media market where
renewed focus on building strong business models and ongoing monetization
streams would become front-and-center. Several social media players made
waves in the public markets this year, with LinkedIn demonstrating continued
strength, while a handful of others experienced their ups and downs. On the
horizon, the next wave of notable social media players – Twitter, Tumblr, Pinterest
and Instagram – have all posted strong user growth as they begin to develop
revenue streams with the possibility of one day joining the public company ranks
(and of course Instagram was acquired for $1 billion by Facebook).
GOOGLE MAINTAINS STRONG LEAD IN SEARCH, BUT BING CONTINUES
TO GAIN GROUND
Google continued its strong lead in the U.S. search market, finishing the year with
66.7 percent market share, but Bing managed to gain ground as it extended its
lead on Yahoo! as the #2 search engine in 2012. The desktop-based U.S. core
search market saw its first ever signs of flattening as an increasing number
of searches shift to vertical-specific searches and mobile platforms.
5

4.
ONLINE VIDEO BRINGS TV DOLLARS TO DIGITAL AS CONSUMERS
BECOME MORE PLATFORM AGNOSTIC
The U.S. online video market also shows signs of maturing from a consumption
standpoint, but monetization is picking up steam as YouTube ramps up its
advertising efforts, while traditional media players are finding success with carrying
TV commercial content. With the demand for high-impact video advertising
exceeding the available inventory, look for the online video market to continue
its strong monetization momentum – particularly as targeting improves.
DIGITAL ADVERTISING IMPROVES ACCOUNTABILITY IN QUEST FOR
PRINT AND TV AD DOLLARS
Nearly 6 trillion display ad impressions were delivered across the web in 2012
as brand marketers become increasingly comfortable with a medium capable
of delivering strong marketing ROI. Despite delivering so many impressions,
comScore research showed that an average of 3 in 10 ads are never rendered
in-view, leading to significant waste, weaker campaign performance and a glut
of poor-performing inventory that imbalances the supply-and-demand equation
and depresses CPMs. Through the continued adoption of a viewable impressions
standard, the market is beginning to embrace a digital scarcity model that better
aligns monetization with the value created by the inventory. By moving to the same
“opportunity-to-see” standard for ads as TV, digital campaigns are increasingly
comparable across media and marketers can more accurately evaluate their
performance and optimize their marketing mix.
SMARTPHONE AND TABLETS CARVE OUT SPACE IN MULTI-PLATFORM
DIGITAL MEDIA LANDSCAPE
The rapid adoption of smartphones and tablets, and consumers’ increasing use
thereof, has resulted in a fragmented digital media landscape where the typical
consumer now spends his time with multiple screens. Nearly 1 in every 3 digital
media minutes are now spent on smartphones and tablets as we embark on the postPC paradigm of this Brave New Digital World. With the majority of mobile content
access occurring via apps rather than the mobile web, a new dynamic has emerged
among media companies and retailers in their competition for eyeballs and wallets.
E-COMMERCE CONTINUES GAINS AT EXPENSE OF BRICK-AND-MORTAR
WHILE CONSUMERS EXPERIMENT WITH M-COMMERCE
Despite the backdrop of continued economic uncertainty, 2012 was a strong year
for retail e-commerce. Throughout the year, growth rates versus the prior year
remained in the mid-teens to outpace growth at brick-and-mortar retail stores by
a factor of approximately 4x. While consumers remained cautious in their spending
habits, they increasingly turned to digital commerce due to three prevailing factors:
price, convenience and selection. Total U.S. retail and travel-related e-commerce
reached $289 billion in 2012, up 11 percent from 2011.
7

5.
With each passing
year, new startups
and innovation
will emerge in
the consumer web.
More than 50 properties
reached 5 to 20 million visitors
in December and also grew
at least 40 percent over
the past year.

6.
TOP WEB DESTINATIONS
GOOGLE OWNS LARGEST AUDIENCE, BUT FACEBOOK TOPS
ENGAGEMENT
Google Sites continued its reign as the top U.S. web property with 191.4 million
unique visitors in December, while Facebook maintained an edge in overall
engagement with 10.8 percent of minutes spent online. The top six positions on
both metrics were occupied by Google, Facebook, Yahoo, Microsoft, AOL and
Amazon, while the next four spots were different on both lists. Perhaps most
interesting is the emergence of Tumblr.com among the top ten web properties by
share of overall engagement.
PROPERTY
TOTAL UNIQUE
VISITORS (000)
PROPERTY
SHARE OF
TOTAL MINUTES
1 Google Sites
191,363
1 Facebook.com
10.8%
2 Yahoo! Sites
184,935
2 Google Sites
10.0%
3 Microsoft Sites
168,889
3 Yahoo! Sites
7.0%
4 Facebook.com
149,602
4 Microsoft Sites
4.9%
5 Amazon Sites
120,810
5 AOL, Inc.
2.5%
6 AOL, Inc.
110,139
6 Amazon Sites
1.0%
7 Glam Media
109,734
7 eBay
0.9%
8 Ask Network
104,080
8 Tumblr.com
0.7%
9 Wikimedia
Foundation Sites
85,847
9 craigslist, inc.
Top Web Properties
by Unique Visitors
(000) and Share
of Total Minutes
Source: comScore
Media Metrix, U.S.,
Dec-2012
0.7%
10 Apple Inc.
83,609
10 ESPN
0.6%
BREAKOUT PROPERTIES ENTER THE MAINSTREAM CONSUMER WEB
If there is one constant in the digital space, it is that each passing year will bring
us new startups and innovation in the consumer web. Very few startups gain
mass consumer adoption right out of the gate, but over a couple of years they can
begin to move beyond their early adopters and cultivate wider audiences. Each
year a handful of breakout properties begin to take the leap into the consumer
mainstream as they cultivate strong consumer brands, amassing audiences in the
millions while delivering strong growth.
More than 50 properties registered between 5 and 20 million visitors in December
while growing at least 40 percent over the past year – one set of criteria to
help identify these breakout properties. The names on this list include some of
the following brands that have either entered or significantly established their
9

7.
presence in the digital space in the past year: Spotify, Dropbox, Etsy, BuzzFeed,
JustFab, SoundCloud and BusinessInsider. Each of these properties have in
common (1) established consumer brands, (2) engaged user bases and (3)
apparently growing revenue engines. In addition, each property has made a point
of leveraging social media to disseminate content and attract new users.
Selected Breakout
Web Properties by Total
Unique Visitors (000)
Source: comScore Media
Metrix, U.S., Dec-2012 vs.
Dec-2011
16,441
Etsy.com
15,914
BuzzFeed.com
12,985
Spotify
8,751
BusinessInsider.com
SoundCloud.com
Dropbox.com
JustFab.com
8,740
8,402
7,396
+64%
+47%
+130%
+43%
+73%
+241%
+200%
Total Unique Visitors (000)
MOBILE PLATFORM SHIFT DRIVES SOFTENING IN DESKTOP USAGE
OF SEVERAL CONTENT CATEGORIES
With smartphones surpassing 50 percent U.S. market penetration in 2012, we
have begun to see a marked shift in usage patterns on the traditional desktopbased web. While most mobile content usage remains incremental to existing web
behavior, certain content categories particularly well-oriented to mobile usage
have witnessed material softness in top-line usage from desktop computers.
Over the past two years, categories such as Newspapers (down 5 percent), Maps
(down 2 percent), Weather (down 12 percent), Directories (down 23 percent),
Comparison Shopping (down 4 percent) and Instant Messengers (down 52
percent) have seen declines despite a 5-percent increase in the total U.S. internet
population over that time.
Maps, Weather and Directories are all reference categories that deliver
significant utility when people are outside and on-the-go, and each category
features several brands that rank among the more popular smartphone apps.
Softness in web-based comparison shopping reflects the growing ‘showrooming’
phenomenon, in which people use their smartphones while in brick-and-mortar
retail stores to obtain competitive pricing information. The decline in desktopbased instant messenger usage reflects a long-term shift away from that means
of communication, as consumers have adopted other methods including social
networking, texting and phone-based instant messaging. Perhaps the most
interesting category shift is that of Newspapers, which has already witnessed a
watershed platform shift from print to digital. Now, we are seeing mobile begin
10

8.
to eat into the traditional web. The good news for newspapers are that people
are consuming more news than ever before and that this timely content continues
to be very popular among people on their mobile devices. The speed of this
platform shift will be worth watching carefully in 2013.
Total Unique Visitor
(000)Trends to Selected
Content Categories
Source: comScore Media
Metrix, U.S., Dec-2010 to
Dec-2012
160,000
Total Unique Visitors (000)
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
DEC
2010
MAR
2011
JUN
2011
SEP
2011
Instant Messengers
Directories
DEC
2011
MAR
2012
JUN
2012
SEP
2012
DEC
2012
Weather
Comparison Shopping
Newspapers
Maps
11

9.
With the rise of the
visual web, 2012 saw
several new social
networks emerge.
Tumblr, Pinterest, and
Instagram each gained
more than 10 million visitors
last year thanks
to eye-catching content.

10.
SOCIAL NETWORKING
SOCIAL NETWORKING ENGAGEMENT STILL DOMINATED BY FACEBOOK,
BUT OTHER PLAYERS CARVE OUT SPACE
Americans’ usage of Social Networking sites continued to be dominated by
Facebook, which accounted for 5 out of every 6 minutes spent in the Social
Networking category. Facebook also grabbed headlines in May as the highestprofile tech IPO since Google. With the intense spotlight of being a public
company, emphasis is beginning to shift from users and usage to revenue streams
and financial performance. While Facebook has clearly built a strong multi-billion
dollar display advertising business, many are now looking at mobile monetization,
the Facebook ad exchange, social gifting/commerce and social search as areas
promising new potential for further growth in Facebook’s revenue per user.
Twitter.com
Twitter.com 1.7%
1.7%
Pinterest.com
Pinterest.com
1.9%
1.9%
LinkedIn.com
1.4%
Linkedin 1.4%
Share of Time Spent on
Social Networking Sites
Source: comScore Media
Metrix, U.S., Dec-2012
Other
Other 6.1%
6.1%
Tumblr.com
Tumblr.com 5.7%
5.7%
Facebook.com
Facebook.com
Tumblr.com
Tumblr.com
Pinterest.com
Pinterest.com
Twitter.com
Twitter.com
Facebook.com
Facebook.com
83%
83.3%
LinkedIn.com
Linkedin
Other
Other
LINKEDIN SOARS IN 2012 FOLLOWING ITS IPO,
WITH TWITTER ON DECK
While Facebook looks to diversify its revenue streams, another social networking
leader – LinkedIn – has demonstrated early strength as a well-run company that is
effectively scaling multiple sources of revenue. As the leading business-oriented
social network, LinkedIn has realized the benefits of a strong network effect in this
market segment while building three robust revenue streams with talent solutions,
marketing solutions and premium subscriptions. By drawing its revenue from end
13

11.
users with a relatively high willingness to pay – businesses, advertisers wanting
to reach business decision-makers and business professionals – LinkedIn is also
able to build these revenue streams at very healthy gross margins.
The other leading social network beyond Facebook and LinkedIn is Twitter, which
battled throughout the year with LinkedIn for the #2 position in the category, just
barely capturing the spot in December. Twitter recently claimed an $11-billion
valuation on private markets, and industry rumors suggest it is a viable candidate
to IPO in 2013. Twitter has reportedly done an effective job scaling its advertising
business through the use of Promoted Tweets, which are becoming increasingly
popular among major advertisers.
45,000
Total Unique Visitors (000)
Twitter and LinkedIn:
Total Unique Visitor
(000) Trend
Source: comScore Media
Metrix, U.S., Dec-2011
to Dec-2012
40,000
35,000
Twitter.com
30,000
LinkedIn
25,000
DEC
2011
FEB
2012
APR
2012
JUN
2012
AUG
2012
OCT
2012
DEC
2012
SOCIAL NETWORKING DRIVEN BY THE RISE OF THE VISUAL WEB IN 2012
While Facebook, Twitter and LinkedIn remain the established leaders in the social
networking space, 2012 saw several sites competing for an increasing amount of
attention and establish themselves as notable players in the market drawing tens of
millions of visitors each month. Three social networks in particular – Tumblr, Pinterest
and Instagram – each gained more than 10 million visitors over the course of the
year in part by catering to a desire for more visually appealing content. comScore
has called this phenomenon “the rise of the visual web.” Of the three, Tumblr had the
largest audience at 30.8 million visitors (up 64 percent from the prior year), while
Pinterest (up 284 percent to 28.9 million visitors) and Instagram (up 284 percent to
27.4 million visitors) both shared the same outsized growth rate.
Now that each of these adolescent social networking sites have matured and
become well-established players with loyal audiences, they too will begin shifting
their orientation towards content monetization. Already Instagram signaled such
a move with its December 2012 decision to change its terms of service, which
seemed to indicate an intention to monetize through social advertising. Tumblr
has begun talking more publicly about its native advertising content – Radar
and Spotlight ads – as a means of generating revenue. And there is additional
14

12.
speculation that Pinterest is looking to develop its own native advertising content
where brands would be able to pay for placement within the existing content
stream.
35,000
Tumblr, Pinterest and
Instagram: Total Unique
Visitor (000) Trend
Source: comScore Media
Metrix, U.S., Dec-2011
to Dec-2012
Total Unique Visitors (000)
30,000
25,000
20,000
15,000
Tumblr.com
10,000
Pinterest.com
5,000
Instagram.com
0
DEC
2011
FEB
2012
APR
2012
JUN
2012
AUG
2012
OCT
2012
DEC
2012
Although 2012 may have been a bit choppy for the business of social, the future
looks bright with so many players demonstrating growth, scale and the realization
of financial value.
15

13.
As the search market
sees first signs
of maturing, Bing
shows steady gains.
While core searches declined
3 percent in the past year,
vertical searches on specific
sites went up 8 percent.

15.
Two potential reasons for the decline in core search intensity are (1) the shift
towards vertical search and (2) the shift to searching on mobile platforms. With
respect to vertical search, consumers are increasingly likely to search for a product
on Amazon or eBay, and search for people on Facebook or Whitepages.com. While
core searches are softening, vertical searches are up 8 percent year-over-year.
The search market is at a bit of a crossroads with the market having stabilized
in many respects, and while it is still extraordinarily profitable, there seems
to be a desire to see the market evolve and deliver new value to consumers.
Current progress on social search suggests it will become a much bigger theme
in the 2013 search market.
18

16.
DISPLAY ADVERTISING
The past year saw the display advertising space continue
to flourish, not just due to sustained investments in large
display campaigns, but also due to growth in the impressions
delivered by advertisers in the long tail. 2012 also brought
with it the growing prevalence of programmatic ad buying,
the rise in popularity of non-standard rich media ad units and
the proliferation of tablets and other mobile devices providing
added opportunities to reach audiences. Dominating
the digital advertising airwaves for much of the year were
the U.S. presidential primaries and general election, turning
the display ad landscape into a digital battleground.
OBAMA CAMPAIGN DOMINATES DISPLAY LANDSCAPE IN 2012 U.S.
PRESIDENTIAL ELECTIONS
Throughout 2012, the Obama and Romney campaigns spent deliberately on online
display ad campaigns as the U.S. presidential election went underway. Despite
delivering more than a billion display ads overall, the Romney campaign was still
significantly outmatched by the Obama campaign. Both campaigns’ ad impression
trends also showed differences in strategy. Advertising for Team Romney peaked
in July prior to the conventions (409 million ads), but the Obama campaign was
already surpassing that volume in late 2011 to try and engage voters. By the
beginning of 2012 the campaign was delivering nearly 1 billion ads per month and
reached an eventual peak of 2.5 billion just before the general election in October.
Obama and Romney
Campaigns Display
Advertising (MM) Trends
Source: comScore Ad
Metrix, U.S., Apr-2011 to
Dec-2012
Display Ad Impressions (MM)
3,000
2,500
2,000
1,500
1,000
500
0
APR
2011
AUG
2011
DEC
2011
Obama For America
APR
2012
AUG
2012
DEC
2012
Mitt Romney For President
19

19.
NUMBER OF HIGH VOLUME ADVERTISERS STABILIZES AS LONG TAIL
DRIVES GROWTH
The number of advertisers delivering at least 1 billion display ad impressions per
quarter remained relatively constant from Q4 2011 to Q4 2012, suggesting that
the overall growth in the display ad market noted earlier is being driven by an
increase in small and mid-sized advertisers.
12
160
140
120
100
Number of Advertisers
Number of Advertisers
Delivering at Least
1 Billion Display Ad
Impressions per Quarter
Source: comScore Ad
Metrix, U.S., Jan-2012 to
Dec-2012
9
17
6
20
17
3
4
12
24
22
20
20
4
15
22
80
60
99
84
93
98
Q4
2011
40
Q1
2012
Q2
2012
Q3
2012
103
20
0
1-3 Billion
3-5 Billion
5-10 Billion
Q4
2012
10+ Billion
As the display ad landscape increasingly leverages programmatic buying and
enhanced targeting techniques, large advertisers may have less need to ramp
up ad volume as they had in previous years. While delivering advertising at scale
remains important, an increased premium on accountability and performance
means advertisers are sacrificing quantity for quality – whether that means
leveraging more rich media, experimenting with larger ad units or demanding
ad viewability. With an average of 3 in 10 ads never actually seen by their target
audiences, it is more important than ever for advertisers to evaluate campaign
viewability to improve optimization and maximize the return on their media spend.
Look for advertisers to demand more accountability and publishers to reconfigure
their site design and ad inventory to improve performance in the coming year.
22

20.
ONLINE VIDEO
ONLINE VIDEO FUELED BY ON-DEMAND VIEWING
Digital video content is rapidly migrating across platforms as more consumers are
valuing on-demand and on-the-go video viewing. The past twelve months saw
Americans engage with online video content via desktop computers at consistently
strong levels. This was a pivotal year for video media as premium video services
continued to draw new customers to digital TV formats. Additionally, the London
Olympics were the video highlight of the year as millions of people worldwide
logged on to watch the Games live or catch up on the replays, resulting in a flood
of additional video views that allowed the media to reach record-breaking levels.
The U.S. online video market attracts an average of 75 million viewers every day
and streams nearly 40 billion videos per month. Meanwhile, the rise of Web TV
and other long-form video content is keeping engagement levels high as more
people turn to digital media to watch their favorite shows whenever it’s most
convenient for them. The year ahead is sure to be defined by an evolved consumer
with high expectations for a flexible multi-screen viewing experience.
38.7
182
Billion
Videos
Million
Total Unique
Viewers
75
Online Video Vital Signs
Source: comScore Video
Metrix, U.S., Dec-2012
Million
Average Daily
Unique Viewers
213
Videos per
Viewer
19.2
Hours per
Viewer
YOUTUBE DRIVES LION’S SHARE OF VIDEO VIEWING ACTIVITY
In 2012, more than 450 billion U.S. content video views occurred via a desktop
computer, representing an all-time high and an increase of 7 percent over 2011.
Google Sites – primarily driven by YouTube.com – once again delivers the highest
volume of video streaming activity with more than 188 billion videos during the
year, representing 42 percent of the market. Hulu ranked #2 for the second year
in a row with 8.9 billion video streams throughout the year, followed by VEVO with
7.6 billion, Yahoo! Sites with 7.3 billion and AOL, Inc. with 7.2 billion.
23

21.
TOP VIDEO CONTENT PROPERTIES RANKED BY VIDEOS VIEWED (MM)
SOURCE: COMSCORE VIDEO METRIX, U.S., JAN-2012 TO DEC-2012
Google Sites
188,758
Hulu
8,875
VEVO
7,626
Yahoo! Sites
7,330
AOL, Inc.
7,199
Microsoft Sites
5,744
Netflix.com
5,431
Viacom Digital
5,361
NDN
3,649
Facebook.com
3,372
ESPN
3,290
Turner Digital
2,904
DailyMotion.com
2,778
Blinkx
2,687
CBS Interactive
2,557
YOUTUBE PARTNER CHANNELS BATTLE FOR HIGHER GROUND
IN TOP 5 RANKING
With YouTube functioning as a market within a market, it has invested in delivering
more premium content through its partner channels. VEVO consistently ranks
as the #1 YouTube partner channel, but the rest of the top five positions are
anybody’s game month-to-month. Fullscreen, Maker Studios, Warner Music and
Machinima competed with each other in the back half of the year for the other
top spots, making for a very exciting unfolding scene to watch as these partners
creatively generate new ways to draw more viewers each month. Fullscreen
managed to edge out the #2 ranking in December, but time will tell if others are
able to reclaim the mantle.
Top YouTube Partner
Channels
by Videos (000)
Source: comScore Video
Metrix, U.S., Aug-2012 to
Dec-2012
60,000
50,000
40,000
Videos (000)
30,000
20,000
10,000
AUG
2012
VEVO
24
SEP
2012
Fullscreen
OCT
2012
Maker Studios, Inc.
NOV
2012
Warner Music
DEC
2012
Machinima

22.
VIDEO ADVERTISING COMES OF AGE
Historically, there has been a noticeable gap between the number of video
ad views versus video content views, with consumer demand for video content
outpacing the movement of ad dollars. Video ad monetization clearly accelerated
in the past year, however, with the volume of monthly video ad impressions surging
59 percent to 11.3 billion in December. The percentage of videos accompanied
by a video ad jumped from just 14 percent in 2011 to nearly 23 percent in 2012.
Despite online video’s high CPMs, brands have found these ad units to be
particularly effective components in their marketing mix and are willing to pay for
their performance. The key to continued monetization in this channel will be freeing
up safe, high-quality inventory to carry video ads.
10
20%
8
15%
6
10%
4
5%
2
0%
DEC
2011
FEB
2012
APR
2012
JUN
2012
Videos (Billions)
AUG
2012
OCT
2012
DEC
2012
0
Videos (Billions)
12
25%
% Ads (Videos)
30%
Video Advertising
as a Percentage of
Total Online Video
Consumption
Source: comScore Video
Metrix, U.S., Dec-2011
to Dec-2012
% Ads (Videos)
25

24.
E-COMMERCE
CHANNEL SHIFT ACCELERATES E-COMMERCE GROWTH DESPITE
ECONOMIC UNCERTAINTY
2012 was another year of slow progress as the U.S. economy worked its way out
of the recession. Despite unemployment hovering at or around 8 percent for much
of the year and a sputtering economic engine, the retail e-commerce sector was
a relative bright spot with year-over-year growth rates in the mid-teens throughout
most of the past twelve months. Total U.S. e-commerce spending reached
$289.1 billion in 2012, representing an increase of 13 percent from 2011. Travel
e-commerce spending grew 9 percent to $103 billion, while retail (non-travel)
e-commerce spending jumped 15 percent to $186.2 billion for the year.
The 2012 online holiday shopping season posted a solid growth rate of 14
percent to $42.3 billion in spending for the November-December period, but the
season actually fell short of initial expectations due to a marked drop in consumer
sentiment in December as fiscal cliff concerns began to wear on the American
consumer. As a result, December marked a low-point for the year in terms of yearover-year growth rate despite November’s strong start to the season.1
$25
20%
18%
$20
17%
16%
$15
15%
14%
$10
13%
12%
$5
11%
10%
$0
JAN
2012
FEB
2012
MAR
2012
APR
2012
MAY
2012
Spending ($ Billions)
1
JUN
2012
JUL
2012
AUG
2012
SEP
2012
OCT
2012
NOV
2012
Year-over-Year Growth Rates
E-Commerce Spending ($ Billions)
19%
2012 Monthly
E-Commerce Spending
and Year-over-Year
Growth Rate
Source: comScore
E-Commerce
Measurement, U.S.,
Jan-2012 to Dec-2012
DEC
2012
Y/Y Growth Rate
November and December growth rates were calculated based on comparable shopping days
in 2011, not calendar dates.
27

25.
$1.465 BILLION CYBER MONDAY RANKS AS TOP ONLINE
SPENDING DAY OF 2012
The heaviest individual spending day of the year was Cyber Monday (Monday,
November 26, 2012) at $1.465 billion, marking the third consecutive year in which
Cyber Monday has ranked as the top online spending day of the season. Cyber
Monday led this past year’s onslaught of billion dollar spending days, with twelve
individual days surpassing that threshold in the holiday season alone. Tuesday,
December 4 ranked second with $1.362 billion in spending, followed by Green
Monday (Monday, December 10) with $1.275 billion.
Top 10 Online
Retail Spending Days
in 2012 (MM)
Source: comScore
E-Commerce
Measurement, U.S.,
Jan-2012 to Dec-2012
$1,465
Monday, Nov. 26 (Cyber Monday)
$1,362
Tuesday, Dec. 4
Monday, Dec. 10 (Green Monday)
Tuesday, Nov 27
$1,275
$1,263
Tuesday, Dec. 11
$1,220
Friday, Dec. 14
$1,219
Thursday, Dec. 13
Monday, Dec. 3
Wednesday, Nov. 28
Wednesday, Dec. 5
$1,135
$1,117
$1,110
$1,051
CYBER MONDAY AND GREEN MONDAY COMPETE FOR ONLINE
SPENDING DOLLARS
Two of the most important days of each holiday spending season are Cyber
Monday, which occurs the Monday following Thanksgiving, and Green Monday,
which occurs on the Monday in mid-December with at least 10 days prior to
Christmas when holiday spending tends to peak for the season. When the term
‘Cyber Monday’ was first coined in 2005, there was a widely-held misconception
that it was the heaviest online spending day of the year. In reality, it simply marked
the kick-off to the heavy part of the online holiday season. At the time, ‘Green
Monday’ was the individual day where spending tended to peak.
Over the years, however, the heavy promotional activity around Cyber Monday
has raised the day’s importance considerably, as it first surpassed Green Monday
spending in 2009 and hasn’t looked back since. For each of the past three
seasons, in fact, Cyber Monday has ranked as the top online spending day while
Green Monday has had to settle for a spot in the top three.
28

27.
Mobile commerce
begins to make a dent
in e-commerce.
M-commerce transactions
now represent approximately
11 percent of e-commerce
spending.

28.
26%
Digital Content & Subscriptions
19%
Consumer Electronics
17%
Apparel & Accessories
16%
Event Tickets
16%
Computer Software
Top 5 Gaining Retail
E-Commerce
Categories of 2012
Source: comScore
E-Commerce
Measurement, U.S.,
2012 vs. 2011
Americans’ collective obsession with the latest electronic gadgets will likely
continue to drive the hottest trends in e-commerce over the coming year.
And while smartphones and tablets will continue to account for the lion’s share
of that activity, look for a variety of other electronic gadgets to begin breaking into
the mainstream. Elegantly-designed household and personal gadgets – including
the Nest Thermostat, Nike+ Fuelband, Fitbit and Pebble – will prove popular with
consumers and turn early adopters into evangelists that will drive adoption among
the early majority.
M-COMMERCE BEGINS TO MAKE A DENT IN E-COMMERCE
While e-commerce continues to shine and gain share from traditional retail,
we are also beginning to see the first signs of mobile commerce affecting the
digital commerce landscape. Smartphones have become an important device
for “showrooming” behavior, where in-store shoppers use their phones to
compare prices and end up transacting via digital channels, which is disrupting
established brick-and-mortar retail. Conducting purchases via smartphones
is not a widespread phenomenon yet, but it is happening – while tablets are
proving to be a bit more transactional given their larger screen size. In the fourth
quarter of 2012, comScore estimates that m-commerce transactions (from
both smartphones and tablets) now represent approximately 11 percent of
corresponding e-commerce spending – a notable percentage worth keeping an
eye on in the coming year.
% of E-Commerce Sales
8%
6%
2%
Q2
2010
3%
Q4
2010
Q2
2011
10%
6%
Q1
2011
8%
9%
3%
Q3
2010
9%
11%
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Percentage of U.S. Retail
E-Commerce Dollars
Spent via Mobile Device
Source: comScore
M-Commerce Survey,
U.S., Q2 2010 to Q4
2012
Q4
2012
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30.
MOBILE
Smartphones continued to drive the mobile landscape in
2012, finally reaching 50-percent market penetration at
the end of Q3. The Android platform also hit a 50-percent
milestone in 2012 as it captured the majority of the
smartphone market for the first time. Meanwhile, tablets
continued to gain traction, with comScore reporting 52.4
million U.S. tablet owners owning nearly 58 million tablets
as of December 2012. Between smartphones and tablets
making their way into the hands of so many consumers today,
multi-platform media consumption is fast becoming the norm.
SMARTPHONES NOW FORM THE MOBILE MAJORITY, LED BY ANDROID
Smartphone adoption continued to increase strongly in 2012 and by September
there were more smartphone users than feature phone users for the first time.
This important threshold now signals that we are in the ‘late majority’ part of the
technology adoption cycle, where attributes such as price and features become
more important drivers of device usage than brand. This dynamic will be especially
important in 2013 as iOS and Android battle for platform market share supremacy.
Smartphone Share
of the Mobile
Subscriber Market
Source: comScore
MobiLens, U.S., 3 Month
Avg. Ending Dec-2011
to Dec-2012
Share of the Mobile Market
70%
60%
50%
40%
30%
20%
10%
0%
DEC
2011
JAN
2012
FEB
2012
MAR
2012
APR
2012
MAY
2012
Smartphone
JUN
2012
JUL
2012
AUG
2012
SEP
2012
OCT
2012
NOV
2012
DEC
2012
Feature Phone
Android currently owns the smartphone market share lead at 53.4 percent while
iOS is a strong #2 at 36.3 percent. The two leading platforms now combine to
account for 9 in 10 smartphones. Despite the combined dominance of Android and
iOS, other platforms – most notably, Windows and BlackBerry – have not given
up the fight and are still looking to assert themselves in the mobile space with new
device models and operating systems.
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32.
1 IN 4 SMARTPHONE OWNERS NOW OWN A TABLET AS CONSUMERS
GO MULTI-PLATFORM
Tablets emerged as a critical piece of the multi-platform digital landscape in 2012
as device penetration moved beyond early adopters and into the early majority
with 52.4 million Americans owning tablets by the end of 2012. Currently, more
than a quarter (28 percent) of smartphone owners also reported owning a tablet,
highlighting the continued rise of the ‘digital omnivore,’ as more consumers access
the Internet through multiple platforms throughout the course of a day. Nearly 4
out of 10 smartphone owners have a secondary digital device, whether it’s a tablet,
e-reader or other handheld device.
28%
Tablet
10%
eReader
Handheld
Share of Smartphone
Subscribers Owning
a Connected Device
Source: comScore
MobiLens, U.S., 3 Month
Avg. Ending Dec-2012
4%
Share of U.S. Smartphone Subscribers
Although tablets initially gained popularity as entertainment devices, tablet owners
now use them for a wide range of activities. Many tablet owners use their tablets
to communicate, with 73.6 percent using their tablets to e-mail others and 67.5
percent using their tablets for social networking. Half of tablet owners report
watching video and TV programming on their tablets. Increasingly, tablets are also
being used for e-commerce activities, such as researching product features (39.1
percent), comparing product prices (38.7 percent) and actually purchasing goods
or services online (38.2 percent).
As tablets become more commonplace, accessible and familiar to consumers
in 2013, we will likely see a rise in these behaviors, as well as changes in
consumption patterns due to having multiple devices. For more insights into the
outlook for mobile in 2013, stay tuned for the accompanying 2013 Mobile Future
in Focus report.
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34.
MULTI-PLATFORM
SMARTPHONES AND TABLETS NOW DRIVE 1 OUT OF 3 MINUTES
SPENT WITH DIGITAL MEDIA
With smartphones and tablets completely reshaping the way we connect with
content and experience media, audiences are fragmenting even further and
attention is getting shared across platforms. In this Brave New Digital World, the
fundamental economics of digital media are at stake if shifting between platforms
means trading dollars for dimes. However, with an overall increase in time spent with
different screens, there are more monetization opportunities for media companies
and optimization opportunities for marketers. Digital businesses still have a chance
to effectively navigate this transition and maximize their opportunities while mitigating
their costs. However, it requires a firm grasp of the multi-platform landscape and an
understanding of how consumer usage patterns are shifting. Without an effective
multi-platform strategy, many companies will be left behind.
The digital media landscape is already well into this transition, and no longer
can smartphone and tablet usage be considered a mere rounding error in digital
consumer behavior. comScore Media Metrix Multi-Platform (Beta), which
provides an unduplicated view of digital media audiences and consumption across
desktop computers, smartphones and tablets, reveals that more than one out of
every three minutes (37 percent) is now spent beyond the PC.
As digital consumers become more reliant on their smartphones and tablets for
everyday content consumption, we can expect this share to rise over time and
perhaps take over majority share during the course of the next year. Envisioning
this reality places a premium not only on getting the mobile channels right, but also
on proving their value in short order.
MORE PLATFORMS MEANS EXTENDED REACH FOR MEDIA COMPANIES
While desktop-based Internet usage has not seen notable declines for the majority
of content categories and leading digital properties, usage does appear to be
leveling off as incremental usage shifts to smartphones and tablets. By accounting
for these incremental audiences, media companies are able to demonstrate
significantly wider scale to advertisers, along with the ability to provide unique
marketing experiences according to the medium.
The average Top 25 digital media property extended its reach via mobile channels
by 29 percent. Certain mobile-oriented properties such as Pandora (+155 percent
reach), ESPN (+59 percent) and Twitter (+46 percent) are extending their reach
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37.
CONCLUSION
2013: PUTTING THE FUTURE INTO FOCUS
MULTI-PLATFORM PARADIGM WILL DRIVE AD AND CONTENT
INTEGRATION STRATEGIES
With the platform shift in full swing, businesses will be challenged in the coming year
to stay ahead of consumers’ usage curve and deliver them with the content they
want, when and where they want it. It will also be imperative to maintain revenue
streams in the core digital channels while capturing market share and monetizing
emerging channels. Doing so will require businesses to get even smarter in how
they scale their content to other platforms by developing integration strategies that
deliver unique offerings to advertisers.
Greater integration between delivery of content and the ability to deliver
campaigns in a multi-platform fashion remains a challenge, but the companies who
facilitate this form of platform agnostic strategy will enhance value to marketers,
simplify campaign management for agencies and foster greater pricing equilibrium
between their content channels. As the bridge between traditional and digital
platforms, online video will play an important leading role in how these integration
strategies materialize.
RENEWED FOCUS ON BUSINESS PERFORMANCE
& CONTENT MONETIZATION
This past year saw previous years’ lofty valuations in the technology sector begin
to come back to earth with several growth companies now trading on the public
markets. As certain stock prices softened following their public offerings, funding
of technology companies became more selective with a bias towards companies
demonstrating strong user growth and developing revenue streams. Newly public
companies are also adjusting to life under the Wall Street spotlight as they are
asked to meet quarterly revenue benchmarks and profit forecasts without the luxury
of being able to rely on future growth expectations alone to drive their valuations.
Such renewed sobriety is an indication that 2013 promises to be the year of “show
me the money” in the technology sector, not only for publicly-traded companies but
also those that are privately funded.
MEDIA COMPANIES WILL FIGHT BACK WITH DIGITAL
CPMS UNDER PRESSURE
The continued downward pressure on CPMs resulting from the rapid adoption
of programmatic ad buying is beginning to meet with stronger resistance in the
industry, particularly among media companies delivering highly engaging content
and coveted audiences that warrant higher CPMs. Premium publishers will take
several measures to protect the value of their inventory, including (1) putting it on
private exchanges with reserve prices to ensure their $5 inventory does not get
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38.
sold at a $1 CPM, (2) demonstrating through metrics that their ads have higher
viewability and ad engagement and (3) proving the effectiveness of their ads to drive
consumer behavior, including in-store sales.
Certain large, premium publishers are also beginning to experiment with and
implement native advertising-based models to deliver unique branded content at
scale. Facebook and Twitter have already successfully implemented such ad units
that leverage the unique value of their platforms, with the added benefit of being
units that work as well on mobile devices as they do on desktop computers. Look for
others to follow suit as a means of enhancing the value of their platforms, increasing
the value of their inventory and improving the scalability of their content.
SOCIAL STRATEGY = SIMPLICITY, SCALE AND SUCCESS METRICS
As marketers continue to get a better handle on social media strategy, they will
look for ways to deliver impact at scale via integrated strategies rather than rely
on fragmented efforts. While Facebook can deliver impact at scale for many large
brands, other channels such as LinkedIn, Twitter, Pinterest and Tumblr are gaining
in importance for different segments of marketers. The need for simplicity and the
ability to efficiently run social programs will mean an increasing reliance on social
marketing platforms that can feed multiple channels and deliver content at scale.
But running the programs will not be enough, as marketers will be called upon
to prove the value and ROI of their efforts and show how this media channel fits into
a brand’s marketing mix.
SOCIAL SEARCH READIES FOR PRIMETIME PUTTING FACEBOOK AND
GOOGLE ON COLLISION COURSE
Facebook’s recent foray into the search market with Graph Search may signal the
future of how social search is likely to evolve. Since the introduction of Google
Plus, Google has been increasingly integrating social elements into their search
results from when Google users click the +1 button. Much of social search’s
early value is likely to reside in local search, when people seek restaurant or event
recommendations while out and about in a particular city. Facebook’s Graph Search,
which incorporates users’ “likes” into search results, will have enough similarities to
Google’s social search elements that the two companies appear to be on something
of a collision course in this nascent segment of the search market.
MOBILE PLATFORM WARS SET TO INTENSIFY
The battle for mobile platform supremacy will intensify in the coming year with
the potential for expansion from two major players to as many as five. While iOS
and Android currently own 90 percent of the smartphone and tablet markets,
Windows has made it clear they are renewing their push for platform share with
major investments on the smartphone and tablet fronts. Continued adoption of the
Windows 8 platform on PCs may provide enough cross-platform synergy to drive
greater mobile adoption of the platform, while BlackBerry looks for a turnaround with
BlackBerry 10.
Other possible entrants into the platform wars include Amazon and Facebook, both
of which have the potential to make a splash. With an established position in the
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39.
tablet market and rumored development of a smartphone, Amazon’s complementary
commerce ecosystem and content assets could be parlayed into a meaningful
segment of the smartphone market. Facebook represents another sleeping giant
in this market given its heavy user engagement on desktop and mobile channels,
along with an existing developer ecosystem. This potential for greater platform
fragmentation means the possibility of a multi-player dynamic in the smartphone
market, resulting in more competitive marketing strategies and accelerating
innovation that could further yield rapid share shifts.
MOBILE DISRUPTION OF TRADITIONAL RETAIL SALES FUNNEL FINALLY
COMES TO A HEAD
Smartphones have become consumers’ most valued shopping companion
as showrooming quickly becomes standard practice for in-store shoppers.
And not only do the majority of Americans now own smartphones, but more recent
adopters are learning how to use them in different ways. Mobile commerce is a
threat on multiple fronts: to brick-and-mortar retailers who are now competing with
e-commerce retailers by way of people’s mobile devices, and to less established
e-commerce retailers who must compete for mobile transactions despite being
unlikely to own app real estate on people’s smartphones. As the e-commerce and
m-commerce channel shifts continue to accelerate, we can expect 2013 to one
challenging for those companies unable to maintain their market shares from one
channel to the next.
BIG DATA EXPLOSION PUTS PREMIUM ON BIG INSIGHTS
Digital businesses today are accumulating an exponentially increasing amount of
data with the potential to translate into significant business value. But many will
admit that this deluge of data far exceeds their ability to meaningfully process the
information, which leaves a considerable amount of value on the table. The core
challenge in the coming year will be developing the tools and competencies needed
to turn big data into big insights. Anyone would be challenged to find a needle in
a haystack (especially when the haystack keeps growing), but the task becomes
more manageable when the right equipment – like a metal detector or high-powered
magnet – is introduced. Similarly, big data can be managed and made useful with
the right architecture to ingest unstructured information, the right technology to
process it quickly, and the right integration with other data sources to deliver muchneeded insights. Many executives have excitedly proclaimed that big data is the new
oil, and while it certainly wields the potential to power the future of business, it must
first be extracted, cleaned and refined before being used as fuel.
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